Achieving Great Profit at Small Risk (2)

Good at Managing Risk

As we have discussed, risk is directly proportional to profit. For that we must be clever or expert in managing risk. How much tolerance of possible risks.

The risk in forex trading is loss. If we do not limit the risk tolerance, it’s the same to let all our capital (possibly) be consumed by the market.

These risk restrictions are also set in the trading plan. One technique is position measurement. At the same time, we can maximize the profit opportunities that exist. We should not be afraid to open a position of two, three, or even ten lots at a time as the risk calculation is still below the tolerance limit.

Immediately Pull profit earned

Most traders do not realize that profit should not be mixed with capital. If we start trading with a capital of $ 5,000 and you have managed to collect a profit of $ 1,000, then immediately pull the profit. Let your account balance back to $ 5,000. Why?

This is so that we do not “lulled” by assuming the capital is still “safe” despite the middle of losses. Like the example above, we have managed to reap a profit of $ 1,000 so that the balance to $ 6,000. In the next transaction it turns out we have a loss (floating loss) to reach – $ 1,000. In these circumstances often a trader thinks that his equity is still a lot and only the previous profit is lost. This feeling of calm washed away. Often traders who are in such conditions actually actually expect the price will bounce back, in order to have a profit.

Often it is precisely when he really suffers a loss, a new regret arises because he thinks his hard work of collecting previous profits becomes futile. In fact quite often also traders who mental drop at the time and wondered, “Is this forex trading is suitable for me?”

Knowing When Exit Position

The “exit” strategy is very important. The simplest is to close the transaction after the target profit is reached, or stop-loss taxable. can also close the transaction immediately after your trading system requires that. What is less commonly realized is immediately close the transaction after the loss reached a certain percentage of the profit that has been obtained previously.

Move On

We are equally aware that there can be no trading system that can be 100% accurate. There are times when we experience losses because the market does not move in accordance with estimates.

At such times, all we have to do is do an evaluation, and move on immediately. There’s no point regretting the lost money in the absolute market movement. If we really have a good trading plan and manage risk tolerance, there’s nothing to worry about.

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